Fin630 GDB No.1 solution
Saturday, November 06, 2010 Posted In Fin Edit ThisMr. A is holding 1500 shares of a company and he wants to buy or sell some shares. He is taking the services of a broker for trading in stock exchange. Broker has analyzed the market trend based on mutual fund cash position analysis and Bar chart analysis. Broker has provided following information to Mr. A on different days:
A. Due to adverse political situation of country and some other economic factors, only 40% of mutual funds are invested in the stock market and rest is idle.
B. In the Bar chart a stock breaks through resistance level.
Required:
Based upon the above information provided by broker:
1. What is feasible for Mr. A (buying or selling) in situation A and in situation B?
2. What will be the market trend (bearish or bullish) in situation A and in situation B?
A. Due to adverse political situation of country and some other economic factors, only 40% of mutual funds are invested in the stock market and rest is idle.
B. In the Bar chart a stock breaks through resistance level.
Required:
Based upon the above information provided by broker:
1. What is feasible for Mr. A (buying or selling) in situation A and in situation B?
2. What will be the market trend (bearish or bullish) in situation A and in situation B?
………………….
Solution:
- What is feasible for Mr. A (buying or selling) in situation A and in situation B?
Ans:
Situation A:
Mr. A will buy the shares.
Situation B:
Mr. A will sell the shares.
2. What will be the market trend (bearish or bullish) in situation A and in situation B?
Ans:
Situation A:
Bearish
Situation B:
Bullish
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